Jeevan Sugam by Life Insurance Corporation of India is a non-participating, single premium, traditional endowment plan with no bonus facility. The risk cover offered to customers will be in multiples of premium payments made by the customer, and the Maturity Sum Assured selected by the customer will be paid out upon maturity. The policy is usually available for no longer than 45 days after the date on which it was launched.
Eligibility Criteria for LIC Jeevan Sugam
|Minimum Entry Age||8 years|
|Maximum Entry Age||45 years|
|Maximum Age at Maturity||55 years|
Key Features of LIC Jeevan Sugam
|Plan Type||Non-participating and single premium endowment plan|
|Death Sum Assured||10 x Single Premium|
|Maturity Sum Assured||Minimum: Rs.60,000 Maximum: No Limit|
|Premium Payment Term||Single|
|Policy Term||10 years|
|Single Premium||Minimum: Rs.32,058 Maximum: No Limit|
Sample premium rates (not including Service Tax) for different age groups per Rs.1000 Maturity Sum Assured:
|Age at Entry||Single Premium Rates|
Benefits and Added Features of LIC Jeevan Sugam
High Maturity Sum Assured Benefit: The Maturity Sum Assured will increase as an incentive for high Maturity Sum Assured amounts selected by the customer. For amounts between Rs.1.5 lacs and Rs.4 lacs, the increase will be 3.50% of the Maturity Sum Assured. For amounts in excess of Rs.4 lacs, the increase will be 4.50% of the Maturity Sum Assured. For instance, if the Maturity Sum Assured is Rs.2 lacs, the Maturity Sum Assured claimable by the customer at the time of maturity will be Rs.2 lacs x 3.5% = Rs.2,07,000.
Maturity Benefit: If the policyholder survives until the maturity of the policy, he / she will receive the maturity benefit (Maturity Sum Assured + Loyalty Additions) and the policy will then be terminated.
Death Benefit: If the Life Assured expires within the initial five years of the beginning of the policy term, the nominees will receive the death benefit (Death Sum Assured) after which the policy will be terminated. In case of death of the Life Assured after the first five years since the beginning of the policy, but within the policy term, the nominee can claim the Death Sum Assured along with Loyalty Additions as death benefit.
Tax Benefit: Customers who purchase LIC Jeevan Sugam are eligible to claim tax deductions to the extent of Rs.1 lac per annum under Section 80C of the Income Tax Act. Also, if terms and conditions are fulfilled, Maturity Proceeds will be treated as tax-free income under Section 10(10)D of the Income Tax Act.
Surrender Value: Customers can surrender the LIC Jeevan Sugam policy for cash and qualify for the minimum Guaranteed Surrender Value as follows:
- 70% of the Single Premium not including extra premiums, if any, during the first year.
- 90% of the Single Premium not including extra premiums, if any, starting from the second year to the last year of the policy term.
Special Surrender Value may be paid by the company on the date of surrender but only if the Special Surrender Value is more than the Guaranteed Surrender Value. The discounted value of the Maturity Sum Assured as on the date on which the policy was surrendered will be the Special Surrender Value. Customers will qualify for Loyalty Additions if they surrender the policy during the final policy year.
Loan: Customers can avail a loan to the extent of 60% of the surrender value of the policy as on the date on which the loan was granted.
Cooling-Off Period: In case customers are not content with the plan's terms and conditions, they have the option to return the same to the company within 15 days from the date on which they received the policy. The reasons for termination of the policy must be stated and presented to the LIC of India, after which it will terminate the policy and return the premium payment made by the customer after allowing for deductions such as risk premium, stamp duty, and other expenses incurred.
How does this Plan Work?
Since LIC Jeevan Sugam is a single premium plan, the premium must be paid upfront at the start of the policy tenure. The term of the policy is fixed at 10 years, and Loyalty Additions are also available. In case of the Life Assured's death during the policy term, the company will pay out the death benefit to the nominee. The amount that can be claimed by the nominee will be 10x the Single Premium paid by the policyholder. In case the policyholder survives until the maturity of the plan, he / she will receive the Maturity Sum Assured as the maturity benefit. Depending upon the Maturity Sum Assured selected by the policyholder, the calculation of premium will be done based on the Life Assured's age at the start of the policy term. The policy will be terminated after the death / maturity benefit has been paid out to the eligible individual.
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GST of 18% is applicable on life insurance effective from the 1st of July, 2017